Scoring chance wasted

Province would have recouped AHL investment

Had St. John’s somehow managed to land the 2013 world women’s hockey championship, a 10- or 12-day tournament, the provincial government was prepared to prop up the local organizing committee with a $200,000 shot in the arm.

Yet the folks on Confederation Hill have snubbed their noses at $500,000 for an American Hockey League team in St. John’s, a move that may scuttle a proposal that would see the Manitoba Moose relocate to the capital city next fall.

For the record, the movers and shakers connected with the Moose-to-St. John’s deal maintain there is no agreement in place. The Telegram has learned it’s signed, sealed and, well, not quite delivered.

The holdup is this little thing going on in Winnipeg, where the imminent NHL transfer of the Atlanta Thrashers to Manitoba has yet to be announced.

Once that happens, the AHL’s Moose will be on their way to St. John’s where Danny Williams will be paying the relocation fee, a guaranteed amount to Mark Chipman’s True North Sports and Entertainment, who retain ownership of the team for the time being, and absorbing any losses the new St. John’s franchise might incur.

There were a few hurdles to overcome here in St. John’s. One was a lease agreement with Mile One Centre, but given St. John’s Sports and Entertainment’s yearning for an anchor tenant — all the better

it’s the AHL — that hasn’t provided much of an obstacle.

Even SJSE will admit, privately, this is the city’s best — and perhaps only — chance at the AHL again.

Given the emerging cost of travel, and the fact the new St. John’s team will be on the hook subsidizing incoming AHL teams, just like the early years of the St. John’s Maple Leafs, some provincial money will be required.

Hurdle? Obstacle? Try Mount Kilimanjaro.

But should we be surprised? Not really. This has nothing to do with a lousy 500 grand that could be dubbed a subsidy, grant, economic development or whatever. It has nothing to do with the fact the government will get its money back, and then some (some at City Hall suggest a $10-million economic spinoff from an AHL team isn’t out of the question).

Unlike the $160,000 the provincial government gave to something called the Atlantic Studios Co-operative Wednesday. A co-op that, get this, has one permanent employee, apparently.

No, this has everything to do with Kathy Dunderdale, the current premier, and the ongoing rift with Danny Williams, the former premier.

Funny, but is there anyone out there who really, truly believes Dunderdale would be plunked in the premier’s chair if not for Williams?

Anyway, back to the point: selling the idea of handing public money over to pro sports has always been a dicey proposition.

But only if it were that simple.

The reality is government was getting a return on this investment, directly through the tax on AHL ticket sales, and indirectly through the spinoff generated by the team.

There is a host of examples for the economic spinoff that could be derived from the American Hockey League:

• a payroll in the $2 million to $3 million range for the new St. John’s team

• increased hotel room occupancies during winter, the low season in the industry

• more staff for Mile One, meaning more money circulating through the community

• out-of-town visitors dropping good money in the city each weekend

• a boost to a downtown that’s not exactly bursting at the seams

And we’re only scratching the surface when it comes to money generated.

Money, by the way, from which the province gets a cut.

But this makes no difference to the crowd who will cry ‘No dough for hockey!’ regardless of the positive arguments. No difference that a game or two on CBC’s Sunday afternoon AHL broadcasts, viewed nation-wide, would cost 10 times the price of those provincial government ads.

No, this is all about Danny Millions. He’s good for it, right?

And on the eighth floor of Confederation Building, one can’t help think an attitude of one-upmanship resonates through the corridors.

Can there be any other plausible explanation? With "Republic of Doyle" getting a million and a half dollars? Countless grants going to local entertainers, professionals in their own right?

With the province as financially well-off today as its ever been, and that coming on Williams’s watch, ironically enough?

Noone really knows if this deal is dead, but you can be sure Williams is very pissed. He will either dig in his heels, and come up with the money. Or he’ll walk, and one close associate of Williams said Wednesday afternoon he wouldn’t be surprised if it was the latter.

Either way, time is of the essence, as they say.

Any day now, and the Atlanta-to-Winnipeg deal will be announced. Shortly afterwards, Chipman and True North Sports will want an answer from St. John’s.

If it’s ‘Thanks, but no thanks’, Mile One may as well pack up the glass and boards, strip down the ice plant and sell the works of it.

Comments

Comments

Your name*Email*Comment*

Recent comments

David

May 27, 2011 - 08:03

How did we get to a world where the public provides the venue, then forks over subsidy money to coerce someone to use it, and people think this is in the LEAST bit sensible? We do not live in a world where we have no other issues, or problems, or unlimited resources...Yet, with health care slowly crumbling around our ears, we think that letting people watch a hockey game in a fancy arena is a genuine priority. Seriously, what kind of society prioritizes professional sports ahead of basic services and infrastructure? Have we all lost our collective minds?

While a long time NHL hockey fan (and having never gone to see a game at Mile One when we had the St. john's Maple Leafs), it seems to me that IF (and that's a big if) it make's good economic sense (at the provincial level) to provide 500K per year to bring a AHL team to the PROVINCE, then perhaps it should be done. How could that economic analysis have been done by the province in less than a 24 hour period? Surely, like any other business venture, if there is a significant, positive economic benefit to NL taxpayer (to the province), then do the analysis, and if it clear that overall it is a good thing, then why not invest in a sporting economic activity when we do it for paper mills, drilling oil wells, fish plants, theater production, TV shows, etc. WHile I know there are other good uses for 500K, if the economic spinoff is significant, that would help provide more money into the provincial economy so that there would be even more money for other, more social, uses.

Mark, your grasp of economics is poor. It causes you to advance arguments that have no validity. I understand of course that not everyone is an economist. (If you're interested in a quick explanation of the economics, you might look at my comment following the original story in the Telegram.) More worrisome is that your grasp of ethics is equally poor. You imply quite clearly that Dunderdale should approve the subsidy if for no other reason than she owes her job as Premier to Danny Williams. No doubt she does owe her job to Williams. For that matter we are all probably indebted to Williams to some degree (although there will be dissenters on that point). While I don't agree with everything he said and did, he undoubtedly left the province in better shape than he found it. But that is no argument in favour of the subsidy any more than if the request was coming, directly or indirectly, from Brian Peckford, Clyde Wells, Brian Tobin or Roger Grimes. Nor I hope would any of these ex-leaders expect preferential treatment. The lack of economic merit (which by the way is materially different from local film production supports) extends not only to this subsidy but to the original decision to build the stadium. Andy Wells and his out-of-control council approved it despite the resounding economic advice against it. Since then the City has struggled to hide the true extent of the burden it placed on city taxpayers. O'Keefe and Breen would now like to spread that burden across the entire Province with the help of cheerleaders like Robin Short. Indeed one of the other posters, Chris, goes so far as to claim the Province would go under if it wasn't for St. John's. If it's any comfort Robin, his ignorance of economics is worse than your own. The fact is, of course, that the very existence of this city is owed to the extraction and processing of natural resources everywhere in this province but St. John's. Indeed St. John's is lucky to be the repository of a huge arrary of governmental, institutional and commercial services made possible by, and intended for, the entire population of the province. Please don't insult the intelligence of people beyond the overpass by suggesting that the privilege is theirs, not ours.

Jehovah
It's obvious you do not know anythig about economics; this is a missed opportunity; nobody including Mr Short whomakes great points must realize that Mile One ireceived a subsidy from the cityy. With a major tenent it would help to reduce that subsidy. When you look at the big picture an AHL teamwould have many other spinoffs. Newfoundlanders enjoy white elephants.
Mr. French made that decision because it ius an election year.
This is sad commentary.

Robin,
I agree with the silliness of the province not putting some petty cash forward but feel you are uninformed regarding Atlantic Studios Cooperative.
I own a local marketing firm and rent lighting/film gear from the ASC frequently. The Co-op framework allows us to rent gear for a very affordable cost and thus gives the local TV/film industry a boost. Bob Petrie (Director & Producer of Pigeon Inlet and major supplier for Doyle) runs the Co-op and has had to rely on well-worn gear and a shoe-string budget for years. This 160k will be put to practical use and invested in much-needed equipment to ensure the NL TV/film industry has access to the industry-standard tools it needs - Bob is a business man and runs a tight ship.
Joe

How come nobody is talking about the fact this will be a 3 year deal and then they are moving to Thunder Bay! Google search Anthony Leblanc.
So we are expected to support a short term deal with taxpayer dollars and then the team is going to move to Thunder Bay when their new building is ready! R U Kidding Me?

A St. John's resident

May 26, 2011 - 13:30

Not a bit bias, are we now, Robin? I guess it wouldn't have anything to do with that you personally love hockey. Well, here's one St. John's citizen who don't want their tax dollars going to finance a hockey team. I have to pay extra money for electricity, extra money for Re-cycling, the city is putting bicycle lanes in front of your house so you have no where to park and all the city is worried about is a hockey team. Neither the other two teams we had worked so, what makes this team any different.. Danny Breen better be careful because come election, he may go the way of his brother, hopefully with a few more of these councillors getting the boot. The government is doing the right thing. They're speaking for all citizens not just "Hockey fans".

The population of Newfoundland as of Oct 2010 was 509 200. People are complaining about the tax dollars to subsidy a Professional Hockey team. If everyone could imagine it as donating $1/year to have a team, would it be worth it? Yes, you know it would be. And people are complaining about paying a couple extra dollars in taxes a year to pay for this. Most of the complaints here are those who don't want a team, or could careless about the industry or don't enjoy it.. Now the government flat out said no deal, but annually, they can raise taxes on tobacco and alcohol. Everyone complains but nothing happens. People continue to buy the tobacco and alcohol because they need it, or ENJOY it....Then this extra money made from taxes goes towards the province. Who in their right mind wouldn't spend roughly $500 000 knowing that they would make approx. $10 000 000, $5 000 000 or even $3 000 000. The government could use this money towards roads, hospitals, homecare, and for individuals who need medical assiatance and can not afford it. To not spend this money is a bad decision by the Dunderdale party. You have to spend money to make money. But this is their decision. However, continue to raise taxes on tobacco and alcohol every year and we should be ok. And for those of you who don't enjoy either products, you have bought this stuff for special occasions/ gifts. Thererfore, you already spent those few extra dollars this year in taxes which could have been a full season of professional hockey. This could provide your son/daughter, husband or wife with a job in the province and will get more people off of unemployment and the province would be banking even more more.Think about it....

Why don't people realize that if it wasn't for St. John's the whole province would go under. All you keep talking about is that it is only beneficial for St. John's and the Municipal Government which makes no sense what so ever. The more money St. John's brings in, the more goes out to the rest of the province. St. John's is the engine that turns the wheels, the stronger it gets, the faster the province will grow!

JEHOVAH, apparently your reasoning is off as well. Hockey fans in this Province tend to spend money in NHL cities by taking trips to watch hockey. The 'negative' in their home towns already exists and instead of paying more money on flights to Toronto, etc, they now may just make the short drive to St Johns and spend the money there. Our Government wastes so much money on countless business proposals and grants to companies with ZERO economic benefit, but because the money is budgeted to that Department, it is spent. That money cannot be 'transferred' to Recreation, Healthcare, etc. This proposal was rejected instantly, with no thought gone into the economic benefits to the Province, and without a comment from our Premier. What a good Leader we have....PATHETIC

Rob - my reasoning may be off, but not for the reason you cite. Your supposition that hockey fans who travel to cities like Montreal or Toronto or Boston to see a team that they obviously have a passion for, will now forgo those trips to go see MINOR league hockey and a farm team to which they have no loyalty is a little dubious. And to justify what would be a bad decision (funding AHL hockey) based on the fact that government makes other bad decisions doesn't have a lot of logic.

jerry rubia

May 26, 2011 - 10:24

well i can see everyone is pleased with the decision that came down about helping out the ahl coming to town . but i have another way it could be done and with the amount of tax that we all get nailed with as it is my suggestion may not be all that bad.
in 2001 here in green bay wisconsin it was voted and with alot of hard work was passed a half percent sale's tax on everything from cars to going out to what ever, u get where iam going i hope. in a little over ten years this city of green bay and the brown county area total pop of just over 200,000 has paid off 295 million dollar renovation to the stadium. all iam saying is a half percent sales tax isnt going to hurt , so why not go about it that way and tell the provincial goverment to half a nice day in not soi many words. just thought i would float that idea.

EuroGuy

May 26, 2011 - 10:55

Well said Rob, and Jehovah also seems to forget that the salary to the players and team staff is 'new money' coming to the local economy.

Get your priorities straight

May 26, 2011 - 09:26

Has anybody thought of approaching the hotels, downtown businesses and fans asking for them to pay the subsidy? No? Gee, I wonder why....

For what it's worth I don't want my tax dollars used for a pro sports team either.
But Robin Short makes a good point. Why should government be handing out our money to T.V. shows, cultural groups, or any other entertainment endeavor. Whether it's a pro hockey team, a week long conference or a new software company, the subsidies are given to enhance economic growth and create jobs. There are numerous companies receiving grants and loans from the NL Government to help grow there business and add to our economy.
Maybe one of the nay sayers can post a comment on this site and explain the difference.
As far as I can see this is just another example of the government takng the polically correct high road with our aging population and our growing unsportsmanlike NL society.

Yes of course, the lousy 500 grand (as Short refers to) per year is all the team needs by way of a subsidy. What happens if after a year or two, the lousy 500 grand isn't enough, and the franchise says that unless it gets an increase in the subsidy, they're out of here?
Personally, I would rather see the 500 grand a year spent on recreational facilities around the province. This would pay big dividends in increased physical fitness for the kids and adults, lowering the obesity levels and cutting back on health care costs, a win win in my humble opinion.
If the downtown bars, restaurants and hotels want the team, let them subsidize it, afterall they are the parties with most to gain.

I thought you were supposed to be a "sports writer", all of a sudden you are a political analyst. I don't want any of my tax dollars going to a hockey team when there are more urgent needs for a half a million a year. I don't care what the spin is, if Mark Chipman wants this team to play in St. Johns, he will find a way.

My understanding of Breen's comment is the subsidy would be annual, not just a one-shot contribution. Another thing, it would'nt bring out of town money 'each weekend' unless you have an advance schedule.

Robin - stick to Sports as Economics is clearly not your thing! For this AHL subsidy to be beneficial to the province, and not just St. John's, there would have to be more of a result than just recirculating money that already exists here in the province. If we don't have AHL hockey to spend our $26.50 per game, guess what? - that money does get buried in the backyard and never get spent, it gets spent on other things like beer, chips, vegetables, gas, night at the movies, etc, etc, etc. The spin-off effect is the same (except govt didn't spend the $500k per year). And while AHL hockey might produce a spin-off in St. John's from out-of-towners, it would also produce a corresponding negative in their home towns, with a net zero overall effect for the province.